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GSA Statement on Distribution Reforms

GSA #9655

March 20, 2000
Contact: Eleni Martin
Peg Strain
(202) 501-1231

The US General Services Administration released the following statement today from David J. Barram, Administrator, and Frank P. Pugliese, Commissioner, GSA Federal Supply Service, regarding the future of the agency's distribution operations:

"GSA's Federal Supply Service (FSS) distribution centers have provided a cost-effective source of products to Federal customers over most of the last 50 years. However, the long-term declining trend in sales, intensifying competition from commercial sources, and an increasingly complex array of customer demands create business issues which require our attention.

"Along with our labor partners, American Federation of Government Employees (AFGE) and the National Federation of Federal Employees (NFFE), we have spent significant time since October, 1999, studying the situation and sharing information. GSA engaged the Logistics Management Institute (LMI) to determine the most cost efficient and effective supply chains that meet customers' needs, and to compare them to FSS' current system. At AFGE's request, LMI worked with two experts from the Harvard Business School.

"The LMI study shows that GSA can generate savings for its customers and maintain current service levels by reducing the number of distribution centers, improving their efficiency, and partnering further with the private sector to supply items Federal customers buy from GSA today.

"The LMI study gives us a reasonable array of options, and now it is time to act.

"In April, 2001, the Palmetto, Georgia and Fort Worth, Texas distribution centers will close. The four forward supply points located in Franconia, Virginia; Chicago, Illinois; Denver, Colorado; and Auburn, Washington also will close by April 2001.

"The distribution centers at Burlington, New Jersey and Stockton, California will be absorbing and adjusting work to accommodate these changes. We believe the overall workload will continue to decline, but at this time we have concluded it is prudent to keep these two facilities open past April 2001.

"Two new organizations will be created within FSS: a Supply Business Line and a Business Planning Unit. The Supply Business Line will ensure a smooth transition to new ways of doing business for our customers. This national program will be led by Woody Landers, currently the FSS Assistant Regional Administrator in Ft. Worth. The distribution centers and forward supply points, along with other supply support functions, will report directly to this Supply Business Line. The Business Planning unit will be created to help FSS identify, analyze and plan for future business opportunities. John Roehmer, currently the Assistant Commissioner for Distribution Management, will assume responsibility for that unit.

"FSS provides a worldwide Federal link to acquisition, supply and distribution, fleet management, excess property disposal, travel, and transportation services. It provides other Federal agencies billions of dollars worth of supplies and services each year with savings going to both customers and taxpayers. FSS will continue to be the dependable source of these services and supplies both during and after this transition is complete. In fact, customers will be offered new and better products and services from FSS based on enhancements underway for GSA's award-winning e-commerce system,
GSA Advantage!, and new commercial partnerships.

"We realize waiting for a decision about the future of FSS' distribution system has been hard on the entire GSA community, especially those in FSS and their families. Throughout this trying time, GSA employees have demonstrated their commitment to professionalism and serving the needs of their customers. Now that the decision is made, we will concentrate on doing everything we can to help affected employees prepare for the best next steps in their work life. We will begin immediately to prepare plans for these actions and we will continue to work in partnership with the unions.

"Maintaining two supply depots will provide a continuous distribution system for individuals with disabilities as outlined in the Javits-Wagner-O'Day (JWOD) Act."